Ken Hu’s Media Roundtable

Ken Hu’s Media Roundtable

Amid intense international media coverage and reports of challenges in a number of markets, Rotating Chairman Ken Hu held a press conference with leading global media at the new campus in Dongguan on Tuesday, December 18. R&D labs showcasing materials developed for 5G and an independent cybersecurity lab were opened for the first time to media, signaling greater openness. Attending were 22 newspapers, broadcasters and trade publications from US, Europe and Asia. They included the Financial Times, CNN, CNBC, Reuters, Fortune and Nikkei.

Mr Hu delivered a strong messages of confidence in Huawei’s business growth and prospects, citing the trust of hundreds of network operators, nearly half of the Fortune 500 companies and hundreds of millions of consumers. Revenue was expected to exceed US$100 billion in 2018.

He addressed directly allegations against Huawei, stating that it is best to let facts speak for themselves while emphasizing repeatedly the company’s security record was clean. There had been no serious cybersecurity incident in 30 years.

Here are some highlights from the press conference (full transcript attached):

On 5G. Huawei has secured 25 commercial contracts, ranking number one, shipping more than 10,000 base stations already. Almost all network customers have indicated they want Huawei, as the market leader with the best equipment for at least the next 12 to 18 months, for faster and more cost-effective upgrades to 5G.

Some security concerns based on the technology for 5G were very legitimate, but able to be clarified or mitigated through collaboration with operators and governments. “Rare cases” have arisen where some countries are hijacking 5G issues for groundless speculation based on “ideological or geopolitical considerations”.

Other security concerns disingenuously raised as excuses to block market competition would slow adoption of new technology, increase costs for network deployment and raise prices for consumers. If Huawei could compete in the US for 5G deployment from 2017 to 2020 some US$20 billion of capital expenditure in wireless infrastructure would be saved, according to some economists.

Cyber security. Security is our highest priority and overarches everything. Mr Hu was open to a question about building cyber security evaluation centres in places such as the US and Australia, pointing to centres in the UK, Canada and Germany as addressing and mitigating concerns. Huawei has subjected itself to the strictest reviews and screening by regulators and customers, while understanding concerns. However, no evidence indicated our equipment posed a security threat.

The Ministry of Foreign Affairs in China had formally clarified that no law requires companies to install mandatory back doors. The company is open to concerns about its openness, transparency and independence as well as dialogue. Any proof or evidence could be shared with telecom operators, if not to Huawei or the public.

Compliance. Media asked about CFO Meng Wanzhou. Mr Hu said he was unable to comment due to legal processes underway. Business operations were not being impacted. Executives’ travel plans were not impacted. Huawei is very confident about its trade compliance system which has been running since 2007. The company has confidence in the fairness and independence of the judicial systems in Canada and the US.

Mr Hu described the company’s recent achievements as exciting, and recalled his almost 30-year history with Huawei during which its people, culture and management had grown. “This is journey of transformation that has helped us grow up from an unknown vendor to the 5G leader.”

He also recognized there are challenges, thanking the media for interest in dialogue and appealing to employees, customers and stakeholders. “I’d like to share a saying from Romain Rolland (French writer awarded the Nobel Prize for Literature in 1915). ‘There is only one heroism in the world: to see the world as it is, and to love it.’ At Huawei, we see what we have encountered and we still love the work we are doing. Similarly, in Chinese, we have a saying. “道阻且长，行且将至.” It means that the road ahead is long and hard, but we will keep moving and reach the destination, because we have already embarked on this journey.”